JinkoSolar Holding Co Ltd ( JKS )  shares are trading lower after the company reported worse-than-expected fourth-quarter FY23 bottom-line results.

Revenue grew 9.4% Y/Y to $4.62 billion, beating the consensus of $4.28 billion.

Quarterly shipments increased 67.7% Y/Y to 27,862 MW (26,335 MW for solar modules and 1,528 MW for cells and wafers).

The mass production efficiency for JKS’ N-type TOPCon cells reached 26%, and N-type modules power output was more than 30wp higher than that of similar P-type modules.

Gross margin contracted to 12.5% from 14.0% in the prior year quarter owing to the decrease in the average selling price of solar modules. The gross profit came in at $576.2 million, down 2.8% Y/Y.

Operating profit margin was 1.1%, a contraction from 2.0% a year ago. The operating income fell 42.6% to $49.6 million. Adjusted EPADS of $1.21 missed the consensus of $2.50.

As of December 31, 2023, JinkoSolar ( JKS ) held $2.75 billion in cash, equivalents, and inventories were $2.57 billion.

Outlook: The Shanghai, China-based company expects its first-quarter module shipments to be around 18.0 GW-20.0 GW.

The company expects FY24 module shipments of 100.0 GW to 110.0 GW. JinkoSolar ( JKS ) expects its annual production capacity for mono wafers, solar cells, and solar modules to reach 120.0 GW, 110.0 GW, and 130.0 GW by the end of 2024.

By the end of 2024, JinkoSolar ( JKS ) projects mass-produced N-type cell efficiency to reach 26.5%, with the proportion of N-type modules shipments in the total module shipments projected to reach around 90% in 2024 on anticipated strong demand for high-efficiency products.

On the other hand, the company expects reduced investments in capacity expansion in 2024 due to supply chain and market conditions. 

Xiande Li, Chairman and Chief Executive Officer, said, “Phase I and II of our integrated project in Shanxi, China will start production gradually in the first half of 2024, as planned, and ramp up in the second half of 2024. This innovative production model relying on fully integrated automation will greatly improve efficiency in labor and operational processes and is expected to bring a significant reduction in operating costs once we reach full production.”

“We expect the decline in module prices to significantly improve the economics of solar energy industry in the short-to-mid-term, and we anticipate demand in the global PV market to continue to increase in 2024….We are confident to successfully navigate through cyclical fluctuations in the PV industry and we expect our market share to further increase in 2024.”

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Price Action: JKS shares are down 6.62% at $26.45 premarket on the last check Wednesday.